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Centennial Resource Development : Simmons Energy Conference

03/22/2021 | 07:01am EDT

March 22-23, 2021


Important Information

Forward-Looking Statements

The information in this presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words "could," "believe," "anticipate," "intend," "estimate," "expect," "project," "goal," "plan," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the development, production, gathering and sale of oil and natural gas. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures and the other risks described in our filings with the Securities and Exchange Commission. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation.

Use of Non-GAAP Financial Measures

This presentation includes the non-GAAP financial measure, Adjusted EBITDAX. Please refer to slide 10 for a reconciliation of Adjusted EBITDAX to net (loss) income, the most comparable GAAP measure. We believe Adjusted EBITDAX is useful as it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to financing methods or capital structure. We exclude the items listed in slide 10 from net (loss) income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net (loss) income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable assets, none of which are components of Adjusted EBITDAX. Our presentation of Adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.

Please refer to slide 11 for a reconciliation of free cash flow (deficit) to net cash provided by operating activities, the most comparable GAAP measure. We believe free cash flow (deficit) is a useful indicator of the Company's ability to internally fund its exploration and development activities and to service or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities or accounts payable related to capital expenditures. The Company believes that this measure, as so adjusted, presents a meaningful indicator of the Company's actual sources and uses of capital associated with its operations conducted during the applicable period. Our computations of free cash flow (deficit) may not be comparable to other similarly titled measures of other companies. Free cash flow (deficit) should not be considered as an alternative to, or more meaningful than, cash provided by operating activities as determined in accordance with GAAP or as indicator of our operating performance or liquidity.

The Company defines net debt as the aggregate principal amount of the Company's notes outstanding minus cash and cash equivalents. The Company presents this metric to help evaluate its capital structure and financial leverage and believes that it is widely used by professional research analysts, including credit analysts, and others in the evaluation of total leverage.

The Company defines net debt to LTM EBITDAX as net debt (defined above) divided by Adjusted EBITDAX (reconciled on slide 10) for the prior twelve-month period. The Company presents this metric to show trends that investors may find useful in understanding the Company's ability to service its debt. This metric is widely used by professional research analysts, including credit analysts, in the valuation and comparison of companies in the oil and gas exploration and production industry.

Centennial Resource Development Overview

Core Acreage and Strong Execution Track-Record

  • Acreage in core of the Northern & Southern Delaware

  • ~81,700 net acres

  • Minimal Federal exposure (~4%)

  • ~97% operated and ~88% held by production

  • Realized significant improvements to cost structure and capital efficiency over the course of FY 2020

  • 2021 drilling program expected to increase capital efficiency and carry operational improvements forward

  • Proven development from 10 distinct zones across the Northern and Southern Delaware

  • 15+ years of economic inventory1

  • No senior note maturities until 20262

  • ~$372mm of liquidity as of 12/31/202

  • Projected free cash flow generation supports organic de-leveraging and liquidity profile

  • Minimizing emissions through increased gas capture

  • Improvements in sustainability through water recycling program, minimizing water trucking and utilization of dual-fuel operations

Notes: Acreage statistics as of 12/31/20; does not include mineral or surface acreage positions

  • (1) Assuming a two-rig flat program and $45/Bbl oil pricing

  • (2) Liquidity and debt maturity profile pro forma for $150mm Exchangeable note offering (excluding potential proceeds from 15% greenshoe) and subsequent redemption of Senior Secured Second Lien notes due 2025

Exchangeable Note Offering Highlights

  • Improves maturity profile by redeeming nearest Senior Note (2nd Lien) maturity at par

  • Strengthens liquidity through elimination of ~$32mm revolving credit facility ("RCF") availability blocker tied to 2nd Lien Note

  • Reduces annual cash interest burden by refinancing highest coupon debt

  • Flexibility to settle notes at maturity through cash, stock or a combination thereof at Centennial's discretion

  • Increases financial flexibility

  • Potential to accelerate de-leveraging the balance sheet

This is an excerpt of the original content. To continue reading it, access the original document here.


Centennial Resource Development Inc. published this content on 22 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 March 2021 12:00:07 UTC.

© Publicnow 2021
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Financials (USD)
Sales 2021 853 M - -
Net income 2021 70,4 M - -
Net Debt 2021 928 M - -
P/E ratio 2021 17,3x
Yield 2021 -
Capitalization 1 455 M 1 455 M -
EV / Sales 2021 2,79x
EV / Sales 2022 2,31x
Nbr of Employees -
Free-Float 62,8%
Duration : Period :
Centennial Resource Development, Inc. Technical Analysis Chart | CDEV | US15136A1025 | MarketScreener
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 15
Last Close Price 5,21 $
Average target price 6,54 $
Spread / Average Target 25,5%
EPS Revisions
Managers and Directors
Sean R. Smith Chief Executive Officer & Director
George S. Glyphis Chief Financial Officer & Vice President
Steven J. Shapiro Non-Executive Chairman
Colleen C. Proctor Vice President-Information Technology
Matthew R. Garrison Chief Operating Officer & Vice President
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